3.
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8. This would of course be pretty well
impossible to do logically. The escalation factor would have to be guessed at and stand: win, lose or draw.
9. I suggest, therefore, on this new basis following upon your letter, the figure of £7 m. per annum. This would cover price inflation of roughly 10% p.a. over the period. I realise the reduction from £8 m. per annum will not be welcome to you: but it seems to me to be now all that I can justify, with any hope of building a credible local case. This figure still represents a 50% increase on the present contribution, and I cannot see how anyone could think it ungenerous.
/o Finally, I think I must again briefly make the points which have been made before:
(a) Hong Kong is not prosperous it has merely been prudent and is faced with exceedingly heavy expenditure in the years immediately ahead. have no hope of getting outside aid to help us meet it.
We
(b) We already spend a lot more than merely the defence contribution on defence and internal security.
(c) A division between external defence and internal security has no validity in our circumstances.
/(d)
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